In my last post, I was expecting a pullback. Price action had begun to stall; it appeared more difficult to move the market up. Recent pullbacks in June, July and early August have been rather deep, especially for a bullish market. That pattern did not hold this week. As the market tried to pull back, price held its gains.
You can see from the daily and 54,000 Tick charts that the market is indeed holding its gains up here. Is this a change of behavior from the previous months? Very possibly. No intraday selling has emerged as seen from the Weis Wave on the Tick Chart. Buyers remain in control. We may be seeing absorption of whatever residual supply exists from the run up to the May 1, 2012 high of 1405.25.
In any event, the lines seem pretty clear: A push above 1405.25 is likely to lead to higher prices. Given the higher time period conditions on the weekly and monthly charts (not shown), I view the odds favoring higher prices. A run up to the March 27, 2012 high of 1419.75 or above is the likely scenario for the upside.
The downside is marked by the late July high of 1387.50. A drive below this level would likely bring out selling and lower prices next week.
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